Termination of Registration Rights

Termination is when a Deemed Liquidation Event happens, and Investors’ registration rights go away. Examples include:

  • At the point after the IPO when all Investors can freely sell their shares on the public market under Rule 144;
  • 3-5 years following the IPO; and
  • Following the acquisition of the Company.

Term Sheet Language: [Upon a Deemed Liquidation Event [in which similar rights are granted or the consideration payable to Investors consists of cash or securities of a class listed on a national exchange]] [and/or after the IPO, when the Investor and its Rule 144 affiliates holds less than 1% of the Company’s stock and all shares of an Investor are eligible to be sold without restriction under Rule 144 and/or] [T][t]he [third-fifth] anniversary of the IPO.
No future registration rights may be granted without consent of the holders of of the Registrable Securities unless subordinate to the Investor’s rights,